Latest Dublin Prices

Aer Lingus 1.99 0.17 more
BoI 0.32 0.00 more
CRH 19.35 0.81 more
Glanbia 12.68 0.25 more
Greencore 0.64 -0.02 more
Ind. News 0.12 0.01 more
Ryanair 9.61 0.21 more


Irish food deals show vibrant sector

Wednesday, January 30 10:59:25

The value of mergers and acquisitions in the Irish food and beverage (F and B) sector rose 32pc to E726m in 2012, demonstrating a renewed vitality in the industry that is recognised worldwide, according to a new report from Grant Thornton today.

The report argues that Irish food companies must continue to invest in ensuring a robust and safe supply chain in order to protect the reputation of an industry that contributed E9bn in exports last year, over E2000 for every person in the country, compared to E400 per person in the United Kingdom.

Commenting on the report, Ciara Jackson, Head of Food at Grant Thornton Ireland said reputation is a vital component of the Irish food industry.

"The level of deal activity shows the food sector had a very strong year, but the recent 'horsegate' controversy is a cause for concern. The reputation of Irish produce has its foundation in high standards of regulation and food safety, and our natural green environment. It is vital that the industry collaborates to create a resilient supply chain that can minimize costs whilst ensuring Irish produce maintains its international standing."

The report demonstrates the rising interest from US companies in investing in high quality Irish food and drink companies with authentic products and strong brands.

US acquisitions of Irish businesses last year included Hain Celestial's E10m acquisition of Cully and Sully, the Cork-based producer of high-end ready meals.

Whiskey giant Beam Inc also completed its purchase of Cooley Distillery in January 2012, and followed up in December with the acquisition of Louth-based 2 Gingers Whiskey.

Equally Irish firms were major investors in the US in 2012, with Kerry Group, Glanbia, Greencore and C and C all making major purchases. C and C's E235m acquisition of the Vermont Hard Cider company was the biggest outbound US transaction last year, with Glanbia's E49m purchase of nutrition drink group Aseptic solutions the second largest.

"In this report, we've noticed a big increase in activity between the US and Ireland, with ten deals in 2012 compared to just two in 2011. Companies such as Glanbia and Kerry Group have had tremendous success due to strong business and cultural synergies and both managements understanding of the opportunities and the scale that the American sports nutrition and food ingredients market has to offer," Ciara Jackson added.

"In the future we also see Asia as a growing market for Irish food exports, with F and B exports up 25pc last year and the region targeted for further expansion in 2013 according to Bord Bia's recent review of F and B export prospects. Cash-rich Asian companies are potential investors in Irish food businesses whose operations may be thriving, but where balance sheets are stretched by ill-judged property investments made in the boom."

The initial Smart Money report (May 2012) found that 87pc of corporate investors see new product development the main driver for growth, making investment in research and development by Irish food companies a priority. Product development continues to be crucial in delivering growth. Kerry Group's E100m euro investment in a new R and D campus will enhance Ireland's reputation as an innovator in the sector, and was backed with E30m support from Enterprise Ireland.